What will car insurance cost when you first hit the road?

CANSTAR examines the cost for P-Platers paying for their own insurance, compared to the cost if you are insured on Mum and Dad’s policy.

Getting on the road – it’s the dream of almost every Aussie teenager.

But there’s no doubt that it’s an expensive exercise. Learners have to cough up for their written test, learner’s licence, driving lessons to reach up to 100 hours in some states and territories, and the practical driving test at the end.

P-platers then face all the costs associated with keeping a car on the road. Buying a car or repaying a car loan costs enough, but then you also have to pay for your licence, registration, filling the tank with petrol, servicing, parking meters when you have to park in the city, replacing ageing tyres – and of course, car insurance.

And here’s the kicker: car insurance costs a packet for Under 25s. Some providers are more reasonable than others, but in general, it’s often cheaper to just contribute towards Mum and Dad’s family policy for them to include you as one of the nominated drivers in their car insurance policy. The family policy premium does increase when you add an under 25 driver to the policy, but not by as much as a normal adult premium increases if the driver is under 25.

Having collected over 24,000 quotes for drivers throughout Australia, here’s what we’ve found.

Compare Car Insurance for Under 25 Women

Compare Car Insurance for Under 25 Men

What affects the cost of Under 25s insurance

How much you fork out for car insurance depends on many factors. Four main things that will affect your premium are your age, your gender, where you live, and the type of car you drive.

Statistics show that as you age and gain more experience in driving, your risk of being involved in a car crash decreases every year. According to the Transport Accident Commission and the Australian Transport Safety Bureau (ATBS), drivers in their first year on the road are four times more likely to be involved in a serious or fatal accident. This is why Under 25s typically pay more for their insurance than adults of other ages. It also means that 20-year-olds will pay less for their insurance than they did when they were a fresh-faced 18. Another reason to celebrate each birthday!

The unfortunate news for young men is that statistics still show that males are more likely to be involved in a car crash that writes off the vehicle. 80% of drivers who die because of speeding are male, and 1 in 3 drivers involved in a speeding incident or a crash are men aged 17-25 years old. So your insurance as a young man will naturally be slightly more expensive on average.

Different states and territories also have different factors that affect your insurance premiums. As you’ll see from our analysis below, the cheapest state in Australia to insure your car for an Under 25 driver (either alone or under a family policy), on average, is Queensland.

As for the type of car you drive, cars naturally get cheaper to insure as they age because they lose some of their value and are worth less to replace. In order to rate different providers, we obtain quotes for both a “new” car of a 2015 model and an “old” car of a 2008 model, for a driver who lives in each state and territory.

Other factors that affect the premium you pay include:

  • Whether the car is parked in a garage or on the street
  • Suburb you live in
  • Your driving record
  • How many kilometres you drive per year
  • Market value that your insurance provider agrees upon for your car
  • Paying annually or by the month (insurance providers often apply a discount if you pay annually)
  • Excess you choose to apply when making a claim
  • Extras cover you choose

The cost of independence

Insurance on your own as an Under 25 driver can be expensive!

Let’s say you had a new car, perhaps purchased with your savings from work, a car loan from the bank, or a grant from the Bank of Mum and Dad. The average premium in Queensland, the cheapest state, is $1,469.85/year for females and $1,646.04/year for males.

Average premium per year for Under 25 drivers
insured alone, with a new car
  Females Males
NSW $2,310.64 $2,607.14
QLD $1,469.85 $1,646.04
VIC $2,082.36 $2,305.52
SA $1,670.22 $1,876.26
TAS $1,511.70 $1,704.99
WA $1,555.55 $1,741.29
Source: www.canstar.com.au


What if you’re driving an older car? Well, on average your car insurance could get $100 to $300 cheaper.

Average premium per year for Under 25 drivers
insured alone, with an older car
  Females Males
NSW $2,069.03 $2,353.13
QLD $1,302.77 $1,473.70
VIC $1,812.77 $2,029.26
SA $1,483.47 $1,675.63
TAS $1,333.76 $1,512.72
WA $1,365.33 $1,538.60
Source: www.canstar.com.au

Insured with Mum and Dad

Insurance for a family that includes an Under 25 driver on the policy can be a much cheaper way for young drivers to insure their ride (assuming that you have to contribute to just part of the policy premium!)

Average premium per year for family policies
with a new car
NSW $2,344.95
QLD $1,548.21
VIC $2,174.69
SA $1,731.86
TAS $1,624.77
WA $1,646.81
Source: www.canstar.com.au

If you’re driving an older car, your car insurance again becomes a little cheaper, although perhaps not as drastically. On average policies can be around $100 cheaper with an older car.

Average premium per year for family policies
with an older car
NSW $2,292.17
QLD $1,442.60
VIC $2,108.23
SA $1,622.34
TAS $1,545.75
WA $1,538.45
Source: www.canstar.com.au

Comparing options for young drivers

Information is power, so once you know there’s more than one way to keep your car insured and on the road, you’re ahead of the pack.

In 2016, we have researched 63 car insurance policies from 53 insurers around Australia and given them star ratings according to how much value they provide for drivers of all ages. Take a look at our comparison tables to see which policies would provide 5-star rated outstanding value for your driving needs.


Compare Car Insurance with CANSTAR

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